Summary
Freakonomics, defined, is the study of trends in society as a result of moral, economic, and social incentives. Here the authors explore the background of economics (founder, Adam Smith, first explored the topic in his book The Theory of Modern Sentiments in1759), and their neo-approach to the topic. Their approach requires sitting back and looking at the world in third person and avoiding conventional logic. They explain trends such the rapid fall of crime rate after its boom in the early 90s, attributing it to the ruling of Roe v. Wade, which spurred many young, drug-using women to have abortions, eliminating a generation of potential criminals before birth. In the first chapter, the comparison between incentives are drawn. A strong moral incentive usually overrides a decent economic one. Freakonomics points out flaws in the system and how, through the use of 'freakonomics,' an outward observation of true incentives in the world, these flaws can be fixed.
Connections
In the introduction, rapidly increasing crime rate was an imminent threat to be dealt with by the government. It was a time when our country urgently sought "change." According the theories of 'Freaks' Steven Levitt and Stephen Dubner, government action was not the solution to this problem. A totally random 'Jane Roe' onset the fall of crime by sending a pro-abortion message to young, unequipped mothers. Our country now is in a similar situation. Our struggling economy is putting people out of jobs, out of homes, and leaving them without healthcare. In this instance, we must ask ourselves if government will be able to bring the urgent change that is necessary. What is the incentive, and how can it be satisfied to better our economy, and the lives of the American people?
Research
Roe v. Wade occured in 1973 when Norma McCorvey ('Jane Roe') fought for the right to woman's abortion after becoming pregnant at age 19. Below is a table demonstrating the influx in crime rate from 1960-2006. As you can see, and from the theory set forth in Freakonomics, crime began to rapidly decline in the time Roe (and her fellow young women who had abortions)'s generation of criminals would have reached about age 20.
Crime Rate
1960
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2008
Violent crime rate
160.9
158.1
168.2
200.2
253.2
328.7
396.0
417.4
487.8
475.9
548.9
594.3
537.7
556.6
609.7
663.1
758.1
746.8
684.6
610.8
523.0
504.4
475.8
469.2
454.5
Homicide rate
5.1
4.8
4.6
5.1
6.2
7.3
8.6
9.4
9.6
8.8
9.8
9.8
8.3
8.0
8.3
8.7
9.8
9.5
8.2
6.8
5.7
5.6
5.7
5.6
5.4
Property crime rate
1,726
1,747
2,012
2,249
2,736
3,351
3,769
3,737
4,811
4,602
5,017
5,264
4,637
4,650
4,940
5,078
5,140
4,738
4,591
4,312
3,744
3,656
3,591
3,430
3,213
More background on the authors: Stephen Levitt is a professor of economics at the University of Chicago. He is best known for his crime theory related to legalized abortion, having written a study on it prior to Freakonomics. Stephen Dubner is a journalist who, in addition to Freakonomics, has written a children's book, and several books on religion.
Summary
'White-collar crime,' or everyday, small-scale lying, cheating, and stealing often goes undetected because there is no obvious victim, giving less of a moral incentive not to commit them. Through the study of a bagel distributor who receives payment through an honor-based system ("Drop your dollar in the box"), smaller communities typically harbor less white-collar criminals because, while there are less witnesses to catch the offender, there is more of an obvious victim. Since people know each other personally, there is a moral incentive not to steal. Next, the authors explore lynching statistics of blacks during the height of the Klu Klux Klan. There were almost twice as many while the Klan was dormant as there were when it had millions of members. The authors theorize that the random threat of terror against the black community had been made so clear before the height of the KKK, that threats were headed with more caution, thus less violent action was actually taken. Instilling fear through random violence and terrorism, they say, is one of the most effective incentives to human kind. Tracking white collar criminals through the bagel study is a perfect example of change in society. As people get higher up in the workplace hierarchy, they are more likely to short the bagel man. This is to say that as a persons economics change, they change how they act in society. The KKK's threats and treatment of the black community at their economic peak indirectly decreased the number of lynchings in the United States at the time.
Discussion Questions
Why is it that embezzlers, and people who steal money are rarely detected? Why do so many seemingly happy and moral people do it?
Does it make a difference for a "White-collar criminal" who or what they steal from? How does their 'victim' make a difference in social incentive to them?
How do global events effect a person's incentives?
What incentives are greater than fear? How is fear of random terror one of the strongest?
Identify the incentive of a member of the KKK.
Question from reading: "Are we to assume that mankind is innately and universally corrupt?" p. 43
Tonight's reading explored stealing information, and how, as the internet has been introduced, trends are changing. In our capitalistic economy, it is typically understood that an expert (someone with a wealth of information on one topic) is hired by a consumer (someone who doesn't). Often, with the proper incentives, an expert receives personal gain from withholding information, or making their client feel ignorant, charging more than they're worth. The internet has greatly closed the gap of information that was once apparent. With websites that compare life insurance rates, contain archives and personal records, it is free for a person to become, to some extent, an expert, in a matter of moments. The authors went on to draw comparisons between real estate agents and KKK members. In their own ways, each of them are experts in their field, having special lingo, and secret information that others don't have access to. Their incentives to keep their information secret are also aligned in that the value (in one case monetary, in the other personal) is greatly decreased when their information is available to others. The end of the reading introduced discrimination on the TV show The Weakest Link. Studies showed that Latinos and the elderly were most discriminated against. Blacks and women had shown no trace of being discriminated against, perhaps due to the success of their rights campaigns in the last century. The authors even hint at fear to appear racist being the possible cause. As the reading related to the essential question, internet and the new, publicly available pool of information has changed society-even putting people out of jobs. On the other end, it is creating jobs as well, changing the social dynamic of the world we live in. Knowledge of the KKK led to a rapid decline in membership. Discrimination on the weakest link, as it shifts (or did it shift?) to a lesser known demographic, represents a growing resentment for, specifically, Mexicans, making it more difficult for them to enter the United States.
Connections
Are teachers in some ways the "experts"? Teachers have a wealth of information that isn't always available to us, the students. Teachers could have personal incentives that could prevent them from giving the information a student wants or needs. Do you think teachers have a widespread incentive to withhold information like teachers giving high-stakes testing do to cheat?
The authors theorize that the majority of the KKK's power comes from the fact that it hoards information. This is similar to, in some ways, student leadership groups at FA. While some of these groups' power derives from the decisions they are able to make, much of the power they hold comes from the secrets they keep and exclusive meetings, like the leadership retreat.
Research
The KKK is still, on a lesser-scale, thought to be around today. The IKA (Imperial Klans of America) hosts events such as "Nordic Fest" that attract crowds of up to 300 people. While they have still committed a few crimes of violence, it is on a much smaller scale even than when they were at their peak. The headquarters is based in Kentucky, and there is even a public website for the organization.
Friday 7 (E Day)-p. 100 Passage Master-Mary Gray
Summary
This reading first explored the idea that people, when making decisions that are public, overcompensate for stereotypical racism, while in a state of privacy, or more important, meaningful decisions, tend to let their true colors show. This has been the case in political campaigns where pre-polls had a much different result than the actual election. In the NYC mayor election between Giuliani (a white candidate) and Dinkins (a black candidate) in 1989, for example, Dinkins was supposed to win by an almost 15 point margin. He only won by only a few points in the actual election. The next chapter follows a graduate student in Chicago who lived with and studied a crack gang for six years. The gang allowed the young economist full access to their books and archives from the past 4 years, and he found that crack gangs are run like any large corporation in the U.S. today. A very small portion of the company's affiliates make most of the money, while the rest make a minimal amount. This disproves the stereotype of the "rich drug dealer." While a very slim margin are extremely rich, most are merely scraping along. The economics of crack gangs very much drives change, and makes history. The crack boom that occurred during the graduate student's studies meant more crime in that area, and a greater income for much of its workers.
Passages to Review
p. 81 "Roughly half of the white..."
On dating sites, most people say that race doesn't matter. However, in actuality, the overwhelming majority of them only sought matches of their own race.
p. 86 "So the conventional wisdom in Galbraith's view..."
We tend to accept and assume "conventional wisdom." This means that we are believing in what makes us comfortable, what is easy, and what is convenient! Yikes!
p. 98 "Mercenary fighters were nonmembers hired on..."
The moral inner-workings of a crack gang are intricate and generous. They work hard to give themselves a good name by throwing "community" events. Ironic, isn't it?
p. 100 "So J.T. paid his employees $9,500,"
Why do crack dealers live with their moms? The vast majority don't make much money at all. The top 2% make more than half of all the profits. This means that a crack gang of this caliber is very much like McDonald's or Walmart.
Summary
This reading starts off aligning dealing drugs with being a Hollywood superstar. Tons of people make it their life goal to make it to the top, but only a fragment of a percent actually make it. We question what drives people to work such long hard hours for something they have a slim chance at ever reaching, but their driving incentive is the one in a million chance that they could be the high-roller someday.Then, it talks about the differences in incentives between someone at the top and someone at the bottom of a large organization. The person at the top just wants to keep the peace, and maintain their steady income, while the person at the bottom is taking every risk to prove that they deserve to be at the top. The next chapter gives background on a Romanian law that lifted the country's ban on abortion, accompanied by a huge increase in crime. The authors compares this to the reason crime dropped in the U.S. when it was so high in the early 90s. The crime in the US didn't drop because of a strong economy-the decrease numbers way too high for that to have been the cause. With every 1% employment increase, there should be a 1% crime decrease. In the decline in the 90s, this ratio was 1:40. Economics drive change in these two cases because a large scale incentive to be ranked highly causes more and more people to work, decreasing the demand for glamour professions, and decreasing the margin of success in each industry, continuing to make Hollywood, and gangs in Chicago's inner-city stronger than ever. Economics ties into the crime rate decrease because by banning abortion, it created an unprecedented decline in crime rate.
Discussion Director
Do you think it is essential for a leader of a large organization to be much more prosperous than those below him? What incentive does it give workers if the people above them on the corporate ladder have a lot more money?
Align your personal incentives with a risky business like drug dealing. Why is it or isn't it worthwhile for you to (hypothetically) maintain such a risky lifestyle?
Do you think allowing abortion should be taken as a cautionary measure to prevent crime?
Do moral incentives for legalizing abortion line up with incentives of fear for crime?
Summary
Tonight's reading counter-argued points of conventional wisdom for the cause of the crime rate decline in the 90s, then proved the authors' theory of legalized abortion as a true factor in crime rate decline. A strong economy, better policing strategies, and more police are all commonly used points to attribute to the infamous 90s decline, however, Freakonomics finds, using real data and other examples in history, that legalized abortion prevents the birth of children who essentially don't have a chance. The next chapter defines fear as an overarching incentive for parents, who will believe almost anything an "expert" has to say on the topic. This leads parents to believe a wide range of absurd theories on parenthood. Legalizing abortion created a huge economic shift in that in the years following the Roe v. Wade trial, there was one abortion for every 2.25 births. In this way, economics drove change in causing a major decline in large-scale crime by killing off a generation of potential criminals.
Connections
The authors here say that parents have fear as a huge incentive to take every precaution for their child's safety. At FA, fear has recently been used as an incentive as it relates to your standing in the school. Threats of detention are becoming more common, (for not turning in Perch forms, for example) causing students, like the parents addressed in Freakonomics, to take action. Just like parents go the extra mile to buy a safer crib or car seat for their child's safety, students are finally going the extra mile to clean up the hallways and turning in forms on time.
Research
The History of the "Legalized Abortion Crime Theory":Swedish economists Hans Forssman and Inga Thuwe studied 188 children born of mothers who had been denied the right to abortion from 1939-41. Stephen Levitt (Freakonomics author) and John Donohue tried to revive this theory with their paper, "The Impact of Legalized Abortion on Crime" in 2001. Their points are reiterated in Freakonomics.
Summary
As we read before, parents take a lot of drastic measures to ensure their children's safety due to a magnified incentive of fear. (Buying expensive car seats, forbidding their children access to homes with guns, etc) This chapter proves, through a study by the US Department of Educations in the early 90s ("Early Childhood Longitudinal Study") that who parents are matters more than what they do for their children. Out of 20,000 students across the country, it was found that things like whether a parent was involved in PTA were a factor in test scores, whereas whether or not a parent took their child to museum did not matter. Whether there were books in a family's home mattered, whereas whether or not the parents read to their children did not matter. While half of a students' personality is passed on through genes, the other half is effected by the environment they are brought up in (WHO their parents are). This was proven through a study of adopted children. Most adoptive parents are educated, well-off, and equipped to raise a child. The study found this to have little effect on their children, whose genetics played a domineering factor in their academic success. As parenthood relates to the essential question, it is known that black students test lower than white students. This is because they typically come from lower-educated, lower-income homes. The economics of black families has effected their performance in the workfield, and is effecting the success of black children.
Passage Master.
p.161 "In a paper called..."
This passage is interesting in that the authors identify certain behaviors as "black people" things and "white people" things.
p. 170
This passage identifies what makes a parent's standing more important than what they do for their child in a more interesting way. Having a nice house doesn't help a child's reading scores, but their ambitions for themselves do.
p. 173 "There is a strong correlation.."
This passage goes over the statistics proving that the IQ of a child's biological parents matter more than that of those who raise him or her. This is interesting because it could mean that some children are already predestined for success or failure.
p. 177 "To overgeneralize a bit..."
This paragraph reiterates the authors' point that what parents do after their child is born doesn't matter where what they ARE matters.
A child's name plays no role in their destiny. In this chapter, it is proven that naming your child "Winner" has no effect on that child's success, just as naming another child "Loser" has no effect on their failure. Parents have an incentive to give their child a name that will lead to success in the workplace and economically, status/and or acceptance into their culture, and a name that aligns with the social standing that they want their child to have. As naming children relates to the economics, names change according to a person's economics. The differences in popular names given by a low-income, low-educated parent differ monumentally from that of a highly-educated, high income parent. A person higher on the economic ladder is more likely to give their child a unique, old name like Philippa, whereas a low income parent is more likely to give their child a simpler name like Angel.
Discussion Director
Why is it that there is such a gap between the popular names of white and black children?
What do you think is an incentive for someone to name their child after something that represents their culture?
At first, it is assumed that a person's name has no effect on their success in life. Is this true? Do you think people are at a disadvantage if they have a lower-income sounding name?
What does it mean for a person in life for their name to be misspelled, like "Micheal" or "Tyler"? What effect does this have on their success in life?
Tuesday 18 (E Day)-p. 220 Connector & Researcher-Mary Gray
Summary
The last official chapter of the book resolved the name game it began. What is a parent's incentive when naming their child? The question is resolved that a parent typically aims to name their child something that, to them, signifies success. This means that if the rich people up the street have been naming their daughters "Lauren" or "Madison" that trend will eventually become apparent in lower-income families trying to be like the higher-income ones. Income and financial economics are not the only incentives parents see for success. Religion, ethnicity, and other factors also play into a parent's incentives for naming their children. In the beginning of the book's "Bonus Matter" we read a Time Magazine article on the author, Stephen Levitt and his accomplishments as a progressive economist, crediting him to having, "distilled the so-called dismal science down to its primal aim: explaining how people get what they want, or need." As child-naming ties in to the essential question, parents who have had less economic success, (be it within their religion, race, or financially) tend to copy the names given by more successful parents. This trend, while it does not typically have a visible affect on the actual success on its "name-ees," creates a history of popular names that reflect economic climate and socioeconomic status.
Connections
The names on the "Most Popular Girls' Names of 2015" seem to me to be old names, and people I know with those names have typically been named after a grandmother, or older relative. It makes me wonder whether names go through a cycle over many years, or whether we'll begin to draw names from a more prosperous era than our own. Philippa, Phoebe, Grace, and Flannery don't exactly sound "soo 2015" to me.
Research
Below are the most popular baby names of 2010, since the book's statistics only reach to 2000. Notice that Twilight names "Isabella" and "Jacob" are in the top 10 most popular names. Many believe that this is a result of the Twilight craze, however, according to Freakonomics' data, it is merely a result of the Isabella and Jacob crazes. This is similar to the Brittany and Shirley cases..Brittney Spears and Shirley temple didn't make their names popular, they were merely named in the trend along with everyone else.
Summary
Now that the book is officially over, we read a Time Magazine Article of the mastermind behind Freakonomics (Stephen Levitt):why he does what he does, how he does it, and why he's so good at it. He studies child precautions because his son died at age 1 of meningitis and other parents at he and his wife's support group had had children drown. He studies real estate agent scams because he refurbished and resold old houses as a hobby when his son died...The list goes on. The article also implies that while it can be, and has been, argued that Levitt's points are trivial, the goal is to help people think about the big issues in the way that we learn to in looking at these smaller examples. They also put Levitt on his way to discovering the answers to the bigger questions himself. While Levitt even criticizes himself for asking the more trivial questions, they trigger change. The economic trends (while maybe not totally conventional) he points out cause history.
Passage Master
p. 221 "I hesitate to use these words.."
This describes Levitt as a con-man..Is he really tricking people into his opinions? Or are his opinions unfairly biased and unsupported?
p. 225 "Then he happened upon.."
This passage is about economists convincing themselves that something is true--how did Levitt so craftily avoid falling into this habit?
p.230 "You write like a college student..."
I think it's very interesting that Levitt tells his student to point out the flaws in her work. Is this helpful, like he says it is to make your weaknesses transparent? Conventionally or realistically?
p. 231 "It might seem absurd"
They say in this passage that "numbers don't lie." Can we base our opinions solely on numbers? Or do we merely look at the numbers because they're easier to sort through?
Thursday 20 (A Day)-p. 260 (done!) Discussion Director-Mary Gray
Summary
The 'Freakonomics' articles in the bonus matter explored new topics not evident in the book. The authors find that people are more likely to vote 'at the polls' than they would be online or by mail, because their social incentive to pay their civic duty outweighs their financial incentive not to drive all the way to the polls. They explore how Dale Earnheardt's death caused more safety measures be taken, which decreased the amount of NASCAR fatalities, but increased reckless driving and non-fatal crashed by giving the assurance that drivers are safer. Then, we examine the dynamics of buying a giftcard, and that the person they benefit most is not the recipient, but the store selling it because people who receive gift cards typically don't spend any or all of its contents, and if they do, they spend more than the amount on the card-always an advantage to the store. The final article talked about labor versus leisure, and questions why people do so many things that can be classified in the field of labor, un-cost-effectively and during their leisure time (Who cooks for fun, right?). As it relates to the essential question, economic trends such as increased safety on the race track drives change, in that people have more of an incentive to drive wrecklessly, and there are more crashes.
Discussion Director
People short themselves more on giftcard "un-usage" than credit and debit card fraud combined each year. How is this justified, and how do incentives effect the difference in people's reaction towards the two?
Is being seen at the poll booth the most valuable part of voting? Do you agree with the Freaks, or not?
Why is it that a "radical overhaul of safety measures" are justified after an accident like Dale Earnheardts, but not after a child drowns in a swimming pool?
Monday 3 (A Day)-p. 20 & Tuesday 4 (B Day)-p. 40
Connector & Researcher-Mary Gray
Summary
Freakonomics, defined, is the study of trends in society as a result of moral, economic, and social incentives. Here the authors explore the background of economics (founder, Adam Smith, first explored the topic in his book The Theory of Modern Sentiments in1759), and their neo-approach to the topic. Their approach requires sitting back and looking at the world in third person and avoiding conventional logic. They explain trends such the rapid fall of crime rate after its boom in the early 90s, attributing it to the ruling of Roe v. Wade, which spurred many young, drug-using women to have abortions, eliminating a generation of potential criminals before birth. In the first chapter, the comparison between incentives are drawn. A strong moral incentive usually overrides a decent economic one. Freakonomics points out flaws in the system and how, through the use of 'freakonomics,' an outward observation of true incentives in the world, these flaws can be fixed.
Connections
In the introduction, rapidly increasing crime rate was an imminent threat to be dealt with by the government. It was a time when our country urgently sought "change." According the theories of 'Freaks' Steven Levitt and Stephen Dubner, government action was not the solution to this problem. A totally random 'Jane Roe' onset the fall of crime by sending a pro-abortion message to young, unequipped mothers. Our country now is in a similar situation. Our struggling economy is putting people out of jobs, out of homes, and leaving them without healthcare. In this instance, we must ask ourselves if government will be able to bring the urgent change that is necessary. What is the incentive, and how can it be satisfied to better our economy, and the lives of the American people?
Research
Roe v. Wade occured in 1973 when Norma McCorvey ('Jane Roe') fought for the right to woman's abortion after becoming pregnant at age 19. Below is a table demonstrating the influx in crime rate from 1960-2006. As you can see, and from the theory set forth in Freakonomics, crime began to rapidly decline in the time Roe (and her fellow young women who had abortions)'s generation of criminals would have reached about age 20.
Wednesday 5 (C Day)-p. 60
Discussion Director-Mary Gray
Summary
'White-collar crime,' or everyday, small-scale lying, cheating, and stealing often goes undetected because there is no obvious victim, giving less of a moral incentive not to commit them. Through the study of a bagel distributor who receives payment through an honor-based system ("Drop your dollar in the box"), smaller communities typically harbor less white-collar criminals because, while there are less witnesses to catch the offender, there is more of an obvious victim. Since people know each other personally, there is a moral incentive not to steal. Next, the authors explore lynching statistics of blacks during the height of the Klu Klux Klan. There were almost twice as many while the Klan was dormant as there were when it had millions of members. The authors theorize that the random threat of terror against the black community had been made so clear before the height of the KKK, that threats were headed with more caution, thus less violent action was actually taken. Instilling fear through random violence and terrorism, they say, is one of the most effective incentives to human kind. Tracking white collar criminals through the bagel study is a perfect example of change in society. As people get higher up in the workplace hierarchy, they are more likely to short the bagel man. This is to say that as a persons economics change, they change how they act in society. The KKK's threats and treatment of the black community at their economic peak indirectly decreased the number of lynchings in the United States at the time.
Discussion Questions
Why is it that embezzlers, and people who steal money are rarely detected? Why do so many seemingly happy and moral people do it?
Does it make a difference for a "White-collar criminal" who or what they steal from? How does their 'victim' make a difference in social incentive to them?
How do global events effect a person's incentives?
What incentives are greater than fear? How is fear of random terror one of the strongest?
Identify the incentive of a member of the KKK.
Question from reading: "Are we to assume that mankind is innately and universally corrupt?" p. 43
Thursday 6 (D Day)-p. 80
Connector & Researcher-Mary Gray
Tonight's reading explored stealing information, and how, as the internet has been introduced, trends are changing. In our capitalistic economy, it is typically understood that an expert (someone with a wealth of information on one topic) is hired by a consumer (someone who doesn't). Often, with the proper incentives, an expert receives personal gain from withholding information, or making their client feel ignorant, charging more than they're worth. The internet has greatly closed the gap of information that was once apparent. With websites that compare life insurance rates, contain archives and personal records, it is free for a person to become, to some extent, an expert, in a matter of moments. The authors went on to draw comparisons between real estate agents and KKK members. In their own ways, each of them are experts in their field, having special lingo, and secret information that others don't have access to. Their incentives to keep their information secret are also aligned in that the value (in one case monetary, in the other personal) is greatly decreased when their information is available to others. The end of the reading introduced discrimination on the TV show The Weakest Link. Studies showed that Latinos and the elderly were most discriminated against. Blacks and women had shown no trace of being discriminated against, perhaps due to the success of their rights campaigns in the last century. The authors even hint at fear to appear racist being the possible cause. As the reading related to the essential question, internet and the new, publicly available pool of information has changed society-even putting people out of jobs. On the other end, it is creating jobs as well, changing the social dynamic of the world we live in. Knowledge of the KKK led to a rapid decline in membership. Discrimination on the weakest link, as it shifts (or did it shift?) to a lesser known demographic, represents a growing resentment for, specifically, Mexicans, making it more difficult for them to enter the United States.
Connections
Research
The KKK is still, on a lesser-scale, thought to be around today. The IKA (Imperial Klans of America) hosts events such as "Nordic Fest" that attract crowds of up to 300 people. While they have still committed a few crimes of violence, it is on a much smaller scale even than when they were at their peak. The headquarters is based in Kentucky, and there is even a public website for the organization.
Friday 7 (E Day)-p. 100
Passage Master-Mary Gray
Summary
This reading first explored the idea that people, when making decisions that are public, overcompensate for stereotypical racism, while in a state of privacy, or more important, meaningful decisions, tend to let their true colors show. This has been the case in political campaigns where pre-polls had a much different result than the actual election. In the NYC mayor election between Giuliani (a white candidate) and Dinkins (a black candidate) in 1989, for example, Dinkins was supposed to win by an almost 15 point margin. He only won by only a few points in the actual election. The next chapter follows a graduate student in Chicago who lived with and studied a crack gang for six years. The gang allowed the young economist full access to their books and archives from the past 4 years, and he found that crack gangs are run like any large corporation in the U.S. today. A very small portion of the company's affiliates make most of the money, while the rest make a minimal amount. This disproves the stereotype of the "rich drug dealer." While a very slim margin are extremely rich, most are merely scraping along. The economics of crack gangs very much drives change, and makes history. The crack boom that occurred during the graduate student's studies meant more crime in that area, and a greater income for much of its workers.
Passages to Review
p. 81 "Roughly half of the white..."
On dating sites, most people say that race doesn't matter. However, in actuality, the overwhelming majority of them only sought matches of their own race.
p. 86 "So the conventional wisdom in Galbraith's view..."
We tend to accept and assume "conventional wisdom." This means that we are believing in what makes us comfortable, what is easy, and what is convenient! Yikes!
p. 98 "Mercenary fighters were nonmembers hired on..."
The moral inner-workings of a crack gang are intricate and generous. They work hard to give themselves a good name by throwing "community" events. Ironic, isn't it?
p. 100 "So J.T. paid his employees $9,500,"
Why do crack dealers live with their moms? The vast majority don't make much money at all. The top 2% make more than half of all the profits. This means that a crack gang of this caliber is very much like McDonald's or Walmart.
Monday 10 (F Day)-p.120
Discussion Director-Mary Gray
Summary
This reading starts off aligning dealing drugs with being a Hollywood superstar. Tons of people make it their life goal to make it to the top, but only a fragment of a percent actually make it. We question what drives people to work such long hard hours for something they have a slim chance at ever reaching, but their driving incentive is the one in a million chance that they could be the high-roller someday.Then, it talks about the differences in incentives between someone at the top and someone at the bottom of a large organization. The person at the top just wants to keep the peace, and maintain their steady income, while the person at the bottom is taking every risk to prove that they deserve to be at the top. The next chapter gives background on a Romanian law that lifted the country's ban on abortion, accompanied by a huge increase in crime. The authors compares this to the reason crime dropped in the U.S. when it was so high in the early 90s. The crime in the US didn't drop because of a strong economy-the decrease numbers way too high for that to have been the cause. With every 1% employment increase, there should be a 1% crime decrease. In the decline in the 90s, this ratio was 1:40. Economics drive change in these two cases because a large scale incentive to be ranked highly causes more and more people to work, decreasing the demand for glamour professions, and decreasing the margin of success in each industry, continuing to make Hollywood, and gangs in Chicago's inner-city stronger than ever. Economics ties into the crime rate decrease because by banning abortion, it created an unprecedented decline in crime rate.
Discussion Director
Do you think it is essential for a leader of a large organization to be much more prosperous than those below him? What incentive does it give workers if the people above them on the corporate ladder have a lot more money?
Align your personal incentives with a risky business like drug dealing. Why is it or isn't it worthwhile for you to (hypothetically) maintain such a risky lifestyle?
Do you think allowing abortion should be taken as a cautionary measure to prevent crime?
Do moral incentives for legalizing abortion line up with incentives of fear for crime?
Tuesday 11 (A Day)-p. 140 & Wednesday 12 (B Day)-p. 160
Connector & Researcher-Mary Gray
Summary
Tonight's reading counter-argued points of conventional wisdom for the cause of the crime rate decline in the 90s, then proved the authors' theory of legalized abortion as a true factor in crime rate decline. A strong economy, better policing strategies, and more police are all commonly used points to attribute to the infamous 90s decline, however, Freakonomics finds, using real data and other examples in history, that legalized abortion prevents the birth of children who essentially don't have a chance. The next chapter defines fear as an overarching incentive for parents, who will believe almost anything an "expert" has to say on the topic. This leads parents to believe a wide range of absurd theories on parenthood. Legalizing abortion created a huge economic shift in that in the years following the Roe v. Wade trial, there was one abortion for every 2.25 births. In this way, economics drove change in causing a major decline in large-scale crime by killing off a generation of potential criminals.
Connections
The authors here say that parents have fear as a huge incentive to take every precaution for their child's safety. At FA, fear has recently been used as an incentive as it relates to your standing in the school. Threats of detention are becoming more common, (for not turning in Perch forms, for example) causing students, like the parents addressed in Freakonomics, to take action. Just like parents go the extra mile to buy a safer crib or car seat for their child's safety, students are finally going the extra mile to clean up the hallways and turning in forms on time.
Research
The History of the "Legalized Abortion Crime Theory":Swedish economists Hans Forssman and Inga Thuwe studied 188 children born of mothers who had been denied the right to abortion from 1939-41. Stephen Levitt (Freakonomics author) and John Donohue tried to revive this theory with their paper, "The Impact of Legalized Abortion on Crime" in 2001. Their points are reiterated in Freakonomics.
Thursday 13 (C Day)-p. 180
Passage Master-Mary Gray
Summary
As we read before, parents take a lot of drastic measures to ensure their children's safety due to a magnified incentive of fear. (Buying expensive car seats, forbidding their children access to homes with guns, etc) This chapter proves, through a study by the US Department of Educations in the early 90s ("Early Childhood Longitudinal Study") that who parents are matters more than what they do for their children. Out of 20,000 students across the country, it was found that things like whether a parent was involved in PTA were a factor in test scores, whereas whether or not a parent took their child to museum did not matter. Whether there were books in a family's home mattered, whereas whether or not the parents read to their children did not matter. While half of a students' personality is passed on through genes, the other half is effected by the environment they are brought up in (WHO their parents are). This was proven through a study of adopted children. Most adoptive parents are educated, well-off, and equipped to raise a child. The study found this to have little effect on their children, whose genetics played a domineering factor in their academic success. As parenthood relates to the essential question, it is known that black students test lower than white students. This is because they typically come from lower-educated, lower-income homes. The economics of black families has effected their performance in the workfield, and is effecting the success of black children.
Passage Master.
p.161 "In a paper called..."
This passage is interesting in that the authors identify certain behaviors as "black people" things and "white people" things.
p. 170
This passage identifies what makes a parent's standing more important than what they do for their child in a more interesting way. Having a nice house doesn't help a child's reading scores, but their ambitions for themselves do.
p. 173 "There is a strong correlation.."
This passage goes over the statistics proving that the IQ of a child's biological parents matter more than that of those who raise him or her. This is interesting because it could mean that some children are already predestined for success or failure.
p. 177 "To overgeneralize a bit..."
This paragraph reiterates the authors' point that what parents do after their child is born doesn't matter where what they ARE matters.
Friday 14 (D Day)-p. 200
Discussion Director-Mary Gray
A child's name plays no role in their destiny. In this chapter, it is proven that naming your child "Winner" has no effect on that child's success, just as naming another child "Loser" has no effect on their failure. Parents have an incentive to give their child a name that will lead to success in the workplace and economically, status/and or acceptance into their culture, and a name that aligns with the social standing that they want their child to have. As naming children relates to the economics, names change according to a person's economics. The differences in popular names given by a low-income, low-educated parent differ monumentally from that of a highly-educated, high income parent. A person higher on the economic ladder is more likely to give their child a unique, old name like Philippa, whereas a low income parent is more likely to give their child a simpler name like Angel.
Discussion Director
Why is it that there is such a gap between the popular names of white and black children?
What do you think is an incentive for someone to name their child after something that represents their culture?
At first, it is assumed that a person's name has no effect on their success in life. Is this true? Do you think people are at a disadvantage if they have a lower-income sounding name?
What does it mean for a person in life for their name to be misspelled, like "Micheal" or "Tyler"? What effect does this have on their success in life?
Tuesday 18 (E Day)-p. 220
Connector & Researcher-Mary Gray
Summary
The last official chapter of the book resolved the name game it began. What is a parent's incentive when naming their child? The question is resolved that a parent typically aims to name their child something that, to them, signifies success. This means that if the rich people up the street have been naming their daughters "Lauren" or "Madison" that trend will eventually become apparent in lower-income families trying to be like the higher-income ones. Income and financial economics are not the only incentives parents see for success. Religion, ethnicity, and other factors also play into a parent's incentives for naming their children. In the beginning of the book's "Bonus Matter" we read a Time Magazine article on the author, Stephen Levitt and his accomplishments as a progressive economist, crediting him to having, "distilled the so-called dismal science down to its primal aim: explaining how people get what they want, or need." As child-naming ties in to the essential question, parents who have had less economic success, (be it within their religion, race, or financially) tend to copy the names given by more successful parents. This trend, while it does not typically have a visible affect on the actual success on its "name-ees," creates a history of popular names that reflect economic climate and socioeconomic status.
Connections
The names on the "Most Popular Girls' Names of 2015" seem to me to be old names, and people I know with those names have typically been named after a grandmother, or older relative. It makes me wonder whether names go through a cycle over many years, or whether we'll begin to draw names from a more prosperous era than our own. Philippa, Phoebe, Grace, and Flannery don't exactly sound "soo 2015" to me.
Research
Below are the most popular baby names of 2010, since the book's statistics only reach to 2000. Notice that Twilight names "Isabella" and "Jacob" are in the top 10 most popular names. Many believe that this is a result of the Twilight craze, however, according to Freakonomics' data, it is merely a result of the Isabella and Jacob crazes. This is similar to the Brittany and Shirley cases..Brittney Spears and Shirley temple didn't make their names popular, they were merely named in the trend along with everyone else.
Wednesday 19 (F Day)-p. 240
Passage Master-Mary Gray
Summary
Now that the book is officially over, we read a Time Magazine Article of the mastermind behind Freakonomics (Stephen Levitt):why he does what he does, how he does it, and why he's so good at it. He studies child precautions because his son died at age 1 of meningitis and other parents at he and his wife's support group had had children drown. He studies real estate agent scams because he refurbished and resold old houses as a hobby when his son died...The list goes on. The article also implies that while it can be, and has been, argued that Levitt's points are trivial, the goal is to help people think about the big issues in the way that we learn to in looking at these smaller examples. They also put Levitt on his way to discovering the answers to the bigger questions himself. While Levitt even criticizes himself for asking the more trivial questions, they trigger change. The economic trends (while maybe not totally conventional) he points out cause history.
Passage Master
p. 221 "I hesitate to use these words.."
This describes Levitt as a con-man..Is he really tricking people into his opinions? Or are his opinions unfairly biased and unsupported?
p. 225 "Then he happened upon.."
This passage is about economists convincing themselves that something is true--how did Levitt so craftily avoid falling into this habit?
p.230 "You write like a college student..."
I think it's very interesting that Levitt tells his student to point out the flaws in her work. Is this helpful, like he says it is to make your weaknesses transparent? Conventionally or realistically?
p. 231 "It might seem absurd"
They say in this passage that "numbers don't lie." Can we base our opinions solely on numbers? Or do we merely look at the numbers because they're easier to sort through?
Thursday 20 (A Day)-p. 260 (done!)
Discussion Director-Mary Gray
Summary
The 'Freakonomics' articles in the bonus matter explored new topics not evident in the book. The authors find that people are more likely to vote 'at the polls' than they would be online or by mail, because their social incentive to pay their civic duty outweighs their financial incentive not to drive all the way to the polls. They explore how Dale Earnheardt's death caused more safety measures be taken, which decreased the amount of NASCAR fatalities, but increased reckless driving and non-fatal crashed by giving the assurance that drivers are safer. Then, we examine the dynamics of buying a giftcard, and that the person they benefit most is not the recipient, but the store selling it because people who receive gift cards typically don't spend any or all of its contents, and if they do, they spend more than the amount on the card-always an advantage to the store. The final article talked about labor versus leisure, and questions why people do so many things that can be classified in the field of labor, un-cost-effectively and during their leisure time (Who cooks for fun, right?). As it relates to the essential question, economic trends such as increased safety on the race track drives change, in that people have more of an incentive to drive wrecklessly, and there are more crashes.
Discussion Director
People short themselves more on giftcard "un-usage" than credit and debit card fraud combined each year. How is this justified, and how do incentives effect the difference in people's reaction towards the two?
Is being seen at the poll booth the most valuable part of voting? Do you agree with the Freaks, or not?
Why is it that a "radical overhaul of safety measures" are justified after an accident like Dale Earnheardts, but not after a child drowns in a swimming pool?